Retail Association Suggest High Online Sales Rise

New statistics claim that in the UK region, digital sales of content (including downloadable films, video games, and music) for the first time surpassed £1b ($1.62b), with the trend representative of streaming and downloaded content becoming ever more popular, and has naturally sparked a small decline for physical media sales in 2012.

entertainment_retailers_association_logoThe data, released by the Entertainment Retailers Association (ERA), shows that transactions for ‘entertainment delivered over the internet’ rose by 11.4% on 2011’s figures, and is a format that is now responsible for ‘over a quarter’ of the home content market.

The lead source of the overall figures was video games (termed by ERA as ‘Massive multiplayer online games, social gaming and online console transactions”), accounting for over half of the total with £552m, despite only increasing 7.7% in its year-on-year sales.

Meanwhile, music made a similarly significant contribution, growing 15.1% to 383m (including a noted 3.7b UK music streams on Spotify alone from external data).

The correlation of higher growth and lower end results was completed with the figures for digital films and video, on a 20.3% growth to £98m.

While this all contributed to an annual total of £1.033b in digital entertainment sales for 2012, it is recognised that physical sales hit a decline in an under-performing year, with DVDs, CDs, and ‘boxed video games’ collectively down 17.6% from the previous year to just over £3b, while overall sales (£4.21b) were also unimpressive when matched with 2011’s, down by 12% for ‘music, video and videogames’ combined (video games individually recorded as dropping 17.4%).

The ERA’s director general Kim Bayley said of the developments, and that physical sales are still a dominant force that is not to be taken lightly: “This reflects their huge investment in new and innovative services – which means you can buy music, video and games literally at any time of the day and wherever you are,” she said in a statement. At the same time I suspect that many people will be surprised to learn just how resilient the physical business still is – with three-quarters of entertainment sales still on disc. Downloads offer convenience and portability, but people still seem to value the quality and tangibility of a physical product.”

She added of her belief that the lower sales were a direct result of content publishers holding back and not wishing to compete primarily with the ever-popular 2012 Olympic Games last summer: “The dearth of attractive releases during summer 2012 was clearly a significant factor [in the sales fall]. Suppliers need to do more to rebalance their release schedules and improve the quality of their releases. No retailer can afford to pay overheads on a store for 52 weeks of the year if all the key releases are going to be concentrated in the last quarter. And entrepreneurs will think twice about investing in new digital services if releases fail to excite the public. Luckily the message appears to be getting through and we look forward to being able to offer the public a much better release slate in 2013.”

With content set to improve according to the ERA, will a surprisingly ‘poor’ 2012 be written off as an anomaly for the industry, and can 2013 make an impact as the most successful year yet for home entertainment in the UK?

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